JTrader
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"To be a daytrader is to watch the unknowable future pass into the obvious present every second."
Hello
I found the above quote on these boards, I think it was within one of rossored's posts - but I may be wrong.
I agree with this quote and it nicely puts into words my thoughts. I think that the challenge is to make sure that I have followed and stayed on the right side of a move after it has taken place.
Anyway...I trade UK stocks using level 2 data and technical analysis (SMA 9 & 18, RSI). I like level 2 because I find it reassuring to be able to see the amount of support and resistance, supply & demand etc. in the underlying market, enabling me to make a more informed decision before placing a trade as to whether it is likely to be successful. Without level 2 data I would feel less in control and more exposed, or naked!
However, I am considering progressing onto trading Forex - EUR/USD inparticular. But with no level 2 data available, my main tools will be charts. When using SMA's as entry criteria there are be times in a sideways market when you enter and then have to exit without gain as the market is sideways. With level 2 at my disposal I am more informed prior to entry as to whether a significant move is likely.
Getting back to the quote, the trouble is we cannot say for sure what will happen until it has happened, especially without an order book. Therefore if I trade with the goal of staying on the right side of the trend, in a sideways market there will be times when my entry criteria are met only for my exit criteria to be followed soon after with no gain. I do not see this as a terminal problem, because it's very possible to be profitable by picking up lots of small losses and the occassional big winners. However, I am looking at finding ways when trading instruments without an order book, to be able to identify, seperate & avoid the sideways trades leading to small losses, and the trending trades leading to substantial profits.
How do others cope with this situation, especially when trading an instrument/product without an order book? Is it possible?
Many thanks
jtrader
Hello
I found the above quote on these boards, I think it was within one of rossored's posts - but I may be wrong.
I agree with this quote and it nicely puts into words my thoughts. I think that the challenge is to make sure that I have followed and stayed on the right side of a move after it has taken place.
Anyway...I trade UK stocks using level 2 data and technical analysis (SMA 9 & 18, RSI). I like level 2 because I find it reassuring to be able to see the amount of support and resistance, supply & demand etc. in the underlying market, enabling me to make a more informed decision before placing a trade as to whether it is likely to be successful. Without level 2 data I would feel less in control and more exposed, or naked!
However, I am considering progressing onto trading Forex - EUR/USD inparticular. But with no level 2 data available, my main tools will be charts. When using SMA's as entry criteria there are be times in a sideways market when you enter and then have to exit without gain as the market is sideways. With level 2 at my disposal I am more informed prior to entry as to whether a significant move is likely.
Getting back to the quote, the trouble is we cannot say for sure what will happen until it has happened, especially without an order book. Therefore if I trade with the goal of staying on the right side of the trend, in a sideways market there will be times when my entry criteria are met only for my exit criteria to be followed soon after with no gain. I do not see this as a terminal problem, because it's very possible to be profitable by picking up lots of small losses and the occassional big winners. However, I am looking at finding ways when trading instruments without an order book, to be able to identify, seperate & avoid the sideways trades leading to small losses, and the trending trades leading to substantial profits.
How do others cope with this situation, especially when trading an instrument/product without an order book? Is it possible?
Many thanks
jtrader
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